labor market policy
Government wants to cut subsidy pot for long-term unemployed
Finance Minister Christian Lindner (FDP) and Defense Minister Christine Lambrecht (SPD) at a Federal Cabinet meeting. Photo: Kay Nietfeld/dpa
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Employers who hire long-term unemployed people can apply for wage subsidies from the state. The government wants to provide less money for this in the future. But the project is controversial.
The federal government wants to cut a funding pot for the long-term unemployed in the coming year. As can be seen from the draft budget passed in the cabinet, only 4.2 billion euros are then planned for “benefits for integration into work”. This year, on the other hand, around 4.8 billion are available. First, the “Spiegel” reported on the numbers.
However, the 4.2 billion is still more than was spent on incorporation last year. For 2021, around 4.04 billion euros are booked. Among other things, wage cost subsidies for employers who hire long-term unemployed people are financed from the pot.
The funds earmarked for 2023 are at the level of the 2019 expenditure, said a spokeswoman for Labor Minister Hubertus Heil (SPD). The Bundestag also decides on the final equipment. Heil will “continue to campaign for an active labor market policy and for a corresponding permanent funding of the social labor market”. It is important that the social labor market is made permanent. Most recently, almost 50,000 people found their way out of long-term unemployment.
The number of long-term unemployed has been increasing since 2020
Long-term unemployed are unemployed who have been unemployed for a year or more. Before the Corona crisis, their number had continuously decreased slightly. According to data from the Federal Employment Agency, it has been rising again since 2020.
The draft budget envisages further cuts for the following years, for example to 2.5 billion euros in 2024 and even to 5 million euros from 2029. The Bundestag will only decide on the budget for 2023. After that, Finance Minister Christian Lindner (FDP) will negotiate again with the relevant ministers, so the longer-term figures are non-binding.
Criticism came from the opposition and parts of the coalition. The cut would be a “blatant declaration of bankruptcy”, said the social politician of the left, Jessica Tatti, the “Spiegel”. If the SPD and the Greens got involved, they gambled away the last bit of socio-political credibility. Bundestag Vice President Katrin Göring-Eckardt announced that the cut would have to be discussed. “Even if you only look at it from an economic point of view and say that we need these workers, it is important to ensure that something like integration aid continues to happen,” said the Greens politician on Deutschlandfunk.